What do you do when you’re an ailing company, suffering the effects of a direct marketing onslaught from your competition ­ and that same competition happens to be negotiating a deal to buy you out of your misery?

You carry on as usual.

At least that’s what CompuServe is doing when it comes to its marketing efforts in Canada.

Last week, the service provider, which listed a loss of us$14.2 million ­ along with 100,000 subscribers ­ in its last reported quarter ended Jan. 31, debuted a revamped Canadian menu with expanded Canadian content, and simultaneously launched a campaign to convince Canadians that CompuServe is the intelligent choice when it comes to on-line providers.

‘I’m going full speed ahead,’ says Deborah Knight, Canada’s brand manager for the Columbus, Ohio-based company, adding that the negotiations between CompuServe and America Online (aol) are at a standstill for the time being.

Knight, who took over the new posting last fall and works out of the u.s. headquarters, says that aol seeks out everyone ­ and that’s not CompuServe’s goal. ‘We are not going after a mass market.’

In fact, Knight says that CompuServe has long avoided the price strategy adopted by aol. ‘We had a lot of discussions about whether the price should be included (in the latest campaign),’ she says, adding that the final decision was to emphasize service and reliability.

It remains to be seen whether CompuServe’s aversion to aol’s mass market strategy will change if the deal comes to pass.

For now, CompuServe is running three print ads, created by Toronto’s AKA Communications Associates, in major dailies across Canada. Knight says the ads are targeted in that specific executions appear in specific sections of the newspaper ­ news, sports and entertainment. aka also handled the media buy.

The news ad, for example, centres on hot story Bre-X, with the line: ‘It took months to expose the greed, corruption and deceit. You can do it in about five minutes.’ All ads have a 1-800 number to order a diskette, allowing consumers to sample the service.

The updated CompuServe menu includes three new Canadian forums ­ one for professionals, one for those interested in discussing politics, and a French translation forum. It also provides 21 choices, from news to entertainment to magazines (where users can link to Maclean’s, Canadian Business and Profit, among others, to get their fill of Canadian content.)

Knight says that although the new campaign is direct response, she d’esn’t expect to see a surge in usage for a few months, because even though people may have ordered the diskette, they need to devote some time to working with a new program. She will not reveal current subscriber levels but claims they’re on par with AOL Canada’s.

The company plans a second flight of the print creative in computer magazines across the country.

CompuServe is also running a test radio spot ­ its first foray into radio in Canada ­ on cfrb in Toronto. The 60-second spot, which was created in-house, positions CompuServe as the intelligent on-line alternative, according to Knight. The spot also emphasizes the reliability of CompuServe’s network ­ something that may have more weight in the u.s., where aol’s clogged networks have been a source of embarrassment for the Dulles, Va.-based company.

(Thanks to Canada’s smaller population base, the impact of aol’s massive direct marketing campaign ­ where countless homes and businesses across North America received disks and promises of hours of free access ­ did not lead to a serious glut of busy signals in Canada, as it did in the u.s.)

According to Knight, Canada’s on-line users are a different lot than their American counterparts. In the u.s., on-line users tend to be more high-income and higher-educated than non-users, whereas it’s a more varied group in Canada, says Knight.

‘I think that it reflects a Canadian cultural difference,’ she says, adding that Canadians are more outward-looking and information-hungry.

She says the campaign is intended to not only attract new users but retain and encourage current users to spend more time on CompuServe.

It’s important to speak to current users as well, says Knight, because 40% of on-line users subscribe to more than one provider. For example, CompuServe considers a household one user, yet the parents could use CompuServe while the kids might be logged onto aol.

Knight says that CompuServe is putting together a media kit to sell ads on its Canadian site and expects to approach advertisers in the coming weeks.